PHILIPPINE STOCK EXCHANGE, INC. vs.

THE MANILA
BANKING CORPORATION et. al.,
G.R. No. 147778 July 23, 2008

FACTS:

In 1980, Manila Bank obtained seat No. 97 in Manila Stock Exchange from
Recio as payment for indebtedness, but MSE refused to register the Seat under Manila
Bank as only its by-laws allow only individuals or corporations engaged primarily in
the business of stocks and bonds brokers and dealers in securities to be a member or
to hold a seat in the MSE and the Manila Bank and MSE agreed that an issuance of an
Acknowledgment Letter (AL) recognizing the legal or naked ownership of, or
proprietary right of Manila Bank over MSE Seat No. 97. AL was issued in 1996.

However, 2 years prior (1994) to the issuance of the AL, MSE merged with
Makati Stock Exchange forming the Phil. Stock Exchange (PSE). In 1994, PSE issued
to Recio a certificate of membership Member No. 29. Manila Bank sought the PSE to
rectify the listing of Recio as a member and that it is actually Manila Bank which
owns proprietary rights over PSE Seat No. 29 PSE refused repeatedly, hence, Manila
Bank filed a Petition for Mandamus with Claim for damages.

PSE filed Motion to Dismiss on the ground that performance of a duty which
required the use of discretion cannot be compelled by Mandamus. SEC en banc and
CA dismissed PSEs motion to dismiss. PSE then filed a petition for certiorari.

ISSUE:

Whether or not Manila Banks petition stated a cause of action against

petitioner PSE.

Whether or not the remedy of mandamus was proper.

RULING:

A careful study of the petition of respondent Manila Bank reveals that the
factual allegations therein sufficiently make out a case of fraud, misrepresentation and
bad faith against petitioners.

Among the salient allegations were:

(1) The previous MSE had already recognized the legal or naked ownership to
MSE Seat No. 97, yet PSE unjustifiably refused to recognize the corresponding seat
in the PSE after the merger;

(2) Manila Banks predecessor-in-interest, Mr. Roberto K. Recio was issued a

Certificate of Membership by the PSE;

(3) Mr. Recio was consistently listed as member of the PSE in the PSEs
Monthly Report.
 These allegations would suffice to constitute a cause of action against
petitioners.

General rule is that performance of an official act or duty, which necessarily

involves the exercise of discretion or judgment, cannot be compelled by mandamus.
Except where there is gross abuse of discretion, manifest injustice, or palpable excess
of authority.